Big money traps and how to avoid them

Our friends at LearnVest offer sound financial tips and advice for every aspect of life. Check out this post on common money mistakes people make and how to avoid them.

You pack your lunch and never buy items at full price. You pay your credit card on time every month and save up for that much-needed vacation every year.

If you’re doing these things, you’re likely on top of your finances. But a new year is always a good time for a new challenge — and we have one for you: In 2013, vow to take your finances to the next level.

How? By learning from the pros.

The Certified Financial Planners (CFPs®) at LearnVest Planning Services have seen the fiscal situations of a lot of people. They know which mistakes people are likely to make, and they know the best ways to fix them.

So we’ve turned their collective wisdom into a must-read guide for turning 2013 into your best money year yet. Read on to find out what exactly not to do — and how not to do it.

Money mistake No. 1: Not saving for retirement when you’re employed

It’s easy to come up with excuses for not saving for retirement. But you should be saving for retirement whenever you’re making money because there will be a time when you won’t be making any money — but you’ll still have to support yourself then. This means that part of every dollar you earn during your working years should go toward funding your non-working years.

If your company doesn’t offer a retirement savings program, open an IRA. If your company offers a plan, but doesn’t match, use these flow charts (single or married) to see how best to allocate your retirement money. Choose the chart according to your tax filing status.

Money mistake No. 2: Not having a game plan for getting out of debt

Don’t let that little voice tell you, “My credit card debt isn’t as bad as my friend’s debt.” And slap your wrist when you think, “I’ll just pay whatever I can this month.”

These are the kinds of rationalizations that “enable” people not to get out of debt. So if any of these thoughts have crossed your mind, get yourself a plan to get out of debt immediately. The top three steps to take:

Make sure you aren’t spending more than you earn.

Decide how much you’ll put toward your debt payments each month — and stick to it.